Each year several of the District of Columbia development agencies issue a Notice of Funding Availability (“NOFA”) that sets out information about how real estate developers may apply for local government project funding. D.C. Department of Housing and Community Development, DC Housing Finance Agency and DC Housing Authority recently issued the 2014 NOFA [http://dhcd.dc.gov/sites/default/files/dc/sites/dhcd/release_content/attachments/Press%20Release%20-%202014_04_02%20%202014%20NOFA.pdf] The NOFA applies to real estate developers seeking financing from any of the following DC government sources: Community Development Block Grant (CDBG) program; Home Investment Partnership (HOME) program; Housing Production Trust Fund (HPTF) program; 9% Low Income Housing Tax Credits (LIHTC) program; Department of Behavioral Health and Department of Health funds administered by the Department of Housing and Community Development; D.C. Housing Authority’s Local Rent Supplement Program; Housing Choice Voucher Program; Annual Contributions Contract Program; and Department of Human Services supportive services funds for permanent supportive housing. June 2, 2014, is the deadline for all NOFA applications.
To apply for NOFA financing, a developer must submit a completed application package to the relevant agency. A completed application package must include all required agency forms and exhibits, as well as a development proposal for the planned project. The development proposal must comply with the applicable agency guidelines (which vary from agency to agency) and detail the type of project, the development team involved, the proposed development budget, existing or planned sources of permanent financing and the anticipated development schedule.
Funds disbursed pursuant to the NOFA are available for real estate developers pursuing gap or primary financing, or both, for construction or preservation of senior housing, affordable housing, mixed-income housing, mixed-use development and transit-oriented development. Using NOFA funding has its pros and cons. Many developers are rightfully concerned that using government funds will result in burdensome restrictions on, and governmental oversight of, their activities. With government funding comes additional complications and reporting obligations. Moreover, depending on the program, using available government funds could adversely impact the overall profitability of a given project. While each financing source has its own regulatory approach and requirements, , when leveraged properly, NOFA financing can provide developers access to lower cost debt and in some instances, up-front equity with limited or no repayment obligations.
Interested in learning more about the NOFA process and how your project may benefit? Ask us.